Real talk with Steve Greenfield, Kyle Pushes Back, 2023 Is Full of Opportunity

‍SPEAKERS

Steve Greenfield, Kyle Mountsier, Paul Daly

Paul Daly  00:00

Well? Yo, what is going on? Welcome to a new week everybody. Today we have a super, super, super special treat. And it's a great way to start your week. We have the one and only Steve Greenfield on the floor at CES talking about 2022 and 2023.

Kyle Mountsier  00:44

then we're gonna I don't know how to get all the people that listen on the podcast to look at the show open but like something like all however many 100 people listen every single day go over to YouTube or LinkedIn and he's not there on

Paul Daly  01:05

the show open is the 32nd countdown on the YouTube.

Kyle Mountsier  01:09

It is. Yeah,

Paul Daly  01:10

it is it is okay. Okay, you can see

Kyle Mountsier  01:12

T U dot V, you can also check out the year and extravaganza there, of which our guest today was a part of CBS

Paul Daly  01:19

he was he was actually the last guest of the show. We're gonna bring in Steve Greenfield, actually, Isaac, why don't you bring him in on the floor at CES. And we look at the background. You know, what you don't know is that he's actually standing on top of a tradeshow booth right now, which is why he's so elevated. But it's your first CES, right?

Steve Greenfield  01:45

Amazingly, yes. After all these years, I've heard so many good things about it. But I'm finally out here.

Paul Daly  01:50

Well, we're gonna we've we've made a pact that we are going to join you next year, because

Steve Greenfield  01:55

you guys need to be here. There's so much automotive content. It's crazy. And I think you know, what's happening is that as automakers are migrating away from the auto shows to do new product introductions, there's a lot of new product introductions here. So there's no shortage of interesting technologies out here to cover.

Kyle Mountsier  02:13

Yet we keep talking about this convergence of pop culture and automotive and I think the OEMs are starting to recognize they have to meet pop culture where it is instead of injecting everybody out of that, especially if there wouldn't become technology or software companies, right, which you talk a lot about.

Steve Greenfield  02:30

Yeah, no, no doubt. I mean, they're making billions of dollars in investments in technology. And this is becoming the de facto event to showcase all that technology.

Paul Daly  02:38

And talk about earned media. Right? Like everyone's talking about it, you have multiple news stations, like talking about the new RAM or talking about, you know, the Sony Honda mobility. So I think like automotive folks getting involved in actually thinking of the dealer community, figuring out how you can harness some of that energy to bring it into your local community into your store, because look until the wheels get to the ground from OEM announcements and tech announcements to people in your showroom. You're kind of left out, you know, the dealers are left out.

Steve Greenfield  03:09

Well, you mentioned that but you know, I tried to find a dealer for a panel that I moderated yesterday out here. And I couldn't find not that I know every dealer in America, but I couldn't find a dealer that was attending CES, which is kind of interesting, but it's not a priority, right yet. I think it will be in the next few years progressive dealers that want cutting edge technologies and exposure are going to be here and make some time. But right now it doesn't see I don't get a sense. There's a lot of dealers here at all.

Paul Daly  03:37

We know that sounds like a heck of a prediction. Yeah, I was gonna say, your predictions. That's not even on your it's not even on your list, but maybe if you already make it. So last week, you released in your monthly Intel report, if you don't get it, you need to get it automotive ventures.com You gave us kind of yourself an honest review of your 2022 predictions, and then you laid out your 2023 predictions. So I think it'd be fun to just talk about 2022 predictions for a second and then we'll ramp up so what we're going to do is start at the bottom right, we're going to start the ones you gave yourself an F right. Because you can handle that. Because you gave yourself Yeah,

Steve Greenfield  04:19

I saw scored so I'm good with

Paul Daly  04:20

it. All right, start we'll start with number three and 2022 which was widespread commercial autonomy on the street. What happened there?

Steve Greenfield  04:28

Yeah, I mean, I think that you know, we're not going to get commercial passenger autonomy in my lifetime I will be dead before we have mainstream Robo taxis servicing consumers in every market here in the US is all edge cases were looking at but the interesting thing oh, they're good my camera. Alright guys, your manual their manual holder. So the main the main thing will be live television, right?

Paul Daly  04:52

It's all good people on the audio version didn't even know.

Steve Greenfield  04:57

The main thing is, you know, my prediction last Fear was by now we would see autonomous trucks all over the streets, especially on long haul stuff across the US. It just hasn't happened yet. We're on the cusp of it, you're gonna see literally LA to New York, you're gonna see long haul trucks and you're gonna see autonomy, but we just haven't quite got there yet for for commercial uses.

Paul Daly  05:17

Okay, the other thing you graded yourself and F dealers awarded points for vertical takeoff and landing. And see any of those this year, huh?

Steve Greenfield  05:25

No, though, you saw the news this weekend, Salanter is going to start building V tall vehicles, right. So I think it's just a matter of time you think about how our consumer is going to buy short range electric, vertical takeoff and landing vehicles in the US, they're gonna have to buy them through dealers. And so your dealers are gonna have a new product to sell, which is going to be vertical takeoff and landing vehicles. I think it was just a couple of years earlier.

Kyle Mountsier  05:48

Yeah, you know, it's interesting. I was having a conversation with a dealer yesterday, they were like, with all these EVs, what's going to happen to service and I was like, well, we're just going to replace it with other profit centers, I think, you know, and there's another profit center, and there's a service profit center alongside of that, and I think dealers are gonna get savvy with their profit center. So yeah, I, if I'm a dealer, if I'm a still antas dealer, I'm definitely kind of, you know, eyes up above above the surface right now, for sure. Especially after the after the announcement this week,

Steve Greenfield  06:13

that it's coming, okay. Maybe a year, a couple years off,

Paul Daly  06:18

maybe a couple of years. Okay. Let's move on to things you graded yourself in a in 2022. And then we'll move to 2023. You said 2022, will be the year of the Evie charging infrastructure gave yourself a explain explain that for us?

Steve Greenfield  06:33

Well, most of us the government stimulus, right when we say inflation Reduction Act, and the billions of dollars are being spent trying to incent other consumers to buy EVs which are starting to hit as of January 1 Now, and or, you know, incentivizing sort of new charging infrastructure getting built out. I mean, we don't have the charging infrastructure needed for roads today. And we're gonna need that charging infrastructure. So you're gonna see trillions of dollars being spent on EVs, both of the produce production of the vehicles as well as the charging infrastructure. And last year, we've just started to see the start of that.

Paul Daly  07:08

And one more 2022 will be the year that connected car, you gave yourself an A.

Steve Greenfield  07:14

Yeah, I mean, the amount of news we saw last year about unbundling features into Subscriptions. And all the consumer pushback has been crazy, you know, and we're starting to hear that the dealer councils are starting to negotiate with the OEMs, around what the revenue share is going to be if the OEMs can sell subscriptions subsequent to the purchase of the vehicle. But I think that the all of that is gonna be very buzzworthy at nada here at the end of the month. Because this these conversations are happening real time, we don't know what the consumer appetite is going to be to want to pay for features on a monthly basis. But you know, it's sure to be there, and there's going to be new revenue, it has yet to be determined how that revenue is gonna be shared between OEMs and dealers. All

Paul Daly  07:55

right, I'm gonna let Ty agree that

Kyle Mountsier  07:57

that's going to be a big nada, it's going to be a big talking point at nada, I think some of probably your other, your predictions for 2023 are actually going to kind of take, they're going to figure out their course at nada potentially. I'm gonna run down kind of the first three first, because they all talk about acquisition. So Reynolds and Reynolds is acquired Tachyon acquired by Salesforce and Carvana acquired by Amazon. These are those are those are pretty bold, I would say those are in my opinion, so thankful

Paul Daly  08:33

for that, though. Cool that it doesn't say like I predict inventory will go up. Thank you for making three interesting.

Kyle Mountsier  08:42

Well, look, I think these questions go ahead. Fire away. Yeah, no, no fire away. The two questions is Reynolds and Reynolds is acquired. What type of company is looking to acquire a Reynolds and Reynolds and then to and maybe to back that up is? Why is Salesforce actually interested in a Tachyon?

Steve Greenfield  09:03

So yeah, okay, so let's take those in order. Right. So what we don't know is what's going on behind the scenes with the US government suit against, you know, a Bob Rock Band from from a tax standpoint, and we don't know, you know, how much pressure there might be with the the the, you know, Brookmans estate to settle. So with those two things, we won't know. But you know, it's inevitable at some point, Reynolds will change hands just because, you know, Brockman is gone now. And likely, there'll be pressure for family members to get their hands on some of that capital, I suspect, I suspect. So, in terms of answering your question, the, the interesting thing is, you know, CDK, global just went off a process, and they finished process, Brookfield purchasing for about $8 billion. So what we know is there's a lot of private equity firms out there that have gotten schools on the DMS space recently, that could be potential buyers, and they have big checks, as we saw with Brookfield, so I think it likely ends up not in a strategic hand. But in a private equity that looks at it and says, you know, how can we take this asset layer on some debt and make some money by taking it back to market? And you know, three to five years?

Kyle Mountsier  10:09

Interesting. All right. Salesforce, why did why do they need one Tachyon?

Steve Greenfield  10:15

Well, look, Salesforce has looked at this category for a long time. I think for a long time, they're like, it's not big enough to bother with. And the fact that it's so nuanced, right, CRMs. And automotive are so specialized, that hasn't been of interest. But we've seen over the last year, but you know, Salesforce is getting into auto, and there are a few dealers now that I know of that are actually have moved over from the legacy CRM providers and have moved over to Salesforce as their CRM of record. So they're getting a little bit of traction, I don't know, but a lot of traction at this point. So to me, it would make sense tech techie on also at some point is going to need to raise more capital, right. I don't know what the state of the capital markets are going to be. But it's not great right now. And when they when they elect to do so I think they're going to be a pretty compelling partner, potentially for a big player like Salesforce.

Kyle Mountsier  11:02

Hey, go. That's that's the only one that I disagree with on your whole platform. And maybe we can jam on that later. Because I don't want to get all up in

Steve Greenfield  11:11

what do you what's your, what's your,

Kyle Mountsier  11:14

here's my, here's my projection on that. One is I think Tachyon is actually going for potentially going public. And I also think that Salesforce is already has enough of a leg in the only reason why would see them acquiring something like Tachyon, because I don't think that the tech is attractive enough. It's really to gain market share quickly. And, and so that would be the only reason why I see them going that way. Because I believe that the learnings that they're getting from these four or five dealer groups that are already integrating with it, and now the multitude of demos that dealer 360 has has acquired over the last three months since their announcement, they are probably going to have enough learning or technology to enter the market more quickly than Tachyon could potentially give them the ability to outside of market, quick market share and OEM relationships. So there's there's a couple of caveats, but I just don't see it happening now. Well, in that case, a year ago, right, could have

Steve Greenfield  12:11

I'd be wrong. And perhaps the suitor for Reynolds is Salesforce. Ah, oh. struck a check that big.

Paul Daly  12:20

They definitely then we'll wait those scores at the end of 2023. If that ends up happening, you just had a credit lines

Steve Greenfield  12:27

were mentioned for Kyle for sure. At the end of Yeah,

Paul Daly  12:31

absolutely. Absolutely. Okay, we're gonna bulk four and five together for his auto tech valuations reset, and dealer dealership valuations dropped those two, those two seem very connected.

Steve Greenfield  12:41

Yeah, and I don't think this is rocket science here. But we're seeing valuation corrections in the public markets, that's coming out back into late stage, private companies, where we invest, which is typically very early seed stage, or precede, we haven't really seen a lot of correction yet. But it's inevitable that, you know, some of the folks out there who wanted to sell and or raise money in the auto tech space are going to have more of a challenge this year, because valuations are coming down. We don't know when they're gonna bottom out. But it's definitely a harder market to raise money or sell right now. And we will see this in some of the multiples when we hear about new transactions over the course of the year.

Paul Daly  13:20

Now, it'll be interesting to see.

Kyle Mountsier  13:21

I've got one, I've got one more prediction to drop in here. We're gonna we're gonna skip number six. But my prediction is that you actually use chat GPT to write the final four predictions of artificial intelligence goes mainstream.

Steve Greenfield  13:39

Exactly. Yeah. It's self referencing in that case, right, exactly.

Kyle Mountsier  13:44

So as artificial intelligence goes mainstream next wave of auto tech process automation, so definitely grouped in there, consolidation of mobility companies, and private equity acquires public companies, which one of those is kind of like you think your hottest prediction for for this next year?

Steve Greenfield  14:01

Well, this is the year of of AI. Right? If you've been tracking this stuff, I mean, AI has over promised and under delivered in automotive and no offense to any of the AI companies out there. But I mean, we haven't seen really strong use cases, I think we're starting to see AI now be quote unquote, smart enough that I can see a future where effectively you don't need a BDC and no offense to BDC, folks, right. But I mean, you'd have AI that can literally handle the lead all the way through to the potential sale. And it's going to learn so quickly that you know it can outsmart a human and be more qualified to answer questions than a human might be. So I think we're this is gonna be the year we're gonna see tremendous progress in automotive around AI.

Paul Daly  14:39

Wow. There you go. I think that that's enough. I think we filled people's brains full on a Monday morning Steve, you're the blood is probably all gone from your arm from holding your camera up this high. Back and forth. We're impressed what's as always Thanks for Thanks for joining us on the show. Thank you for representing automotive well at CES So we're gonna bring a whole posse full of people next year to hang out with you.

Steve Greenfield  15:05

We are very busy out here. Oh, yeah.

Paul Daly  15:07

Which day is this?

Steve Greenfield  15:11

Middle of Friday right now. Very nice. Two more days left.

Paul Daly  15:16

That's a marathon right there. Well, thanks for joining us, Steve, as always, and we're gonna catch up with you really soon. Okay, guys, thank you

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